The discussion and analysis of our financial condition and results of operations that follow are based on Audited Consolidated Financial Statements of Embassy REIT and the REIT assets/ SPVs/ holdco (together known as the Group) for the year ended March 31, 2026 (FY26) prepared in accordance with Indian Accounting Standards (Ind AS) and applicable REIT regulations, which include the comparative numbers for the year ended March 31, 2025 (FY25). The financial information included herein is being presented to provide a general overview of the Group?s performance for the financial year ended March 31, 2026 as compared against the financial year ended March 31, 2025 based on certain key financial metrics for general information purposes only and does not purport to present a comprehensive representation of the financial performance of the Group for these periods.
The Embassy REIT, the Trustee, the REIT assets/ SPVs/ holdco and the Manager make no representation, express or implied, as to the suitability or appropriateness of this comparative information to any investor or to any other person. Some of the information contained in the following discussion(s), including information with respect to our plans and strategies, may contain forward-looking statements based on the currently held beliefs, opinions and assumptions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Embassy REIT or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward-looking statements. Please refer to the disclaimer section at the end of the Annual Report for a discussion of the risks and uncertainties related to those statements. You should read this discussion in conjunction with our Audited Consolidated Financial Statements that we have included in this Annual Report and the accompanying notes to accounts.
Executive Overview
Embassy REIT is India?s first publicly listed Real Estate Investment Trust. We own, operate and invest in high quality real estate and related assets that generate rental income from our occupiers. We generate 47% of gross rents from Fortune 500 corporations and GCCs contribute close to 67% of our total rentals. As a REIT, we are mandated by SEBI to pay at least 90% of our Net Distributable Cash Flows as distributions to our unitholders.
Embassy REIT comprises 43.5 msf of completed area and 6.2 msf of under construction area. With the future development potential of 2.8 msf, the total leasable area adds up to 52.5 msf as on March 31, 2026. The commercial office portfolio is spread across ten infrastructure like office parks (50.2 msf) and four prime city-center office buildings (2.3 msf) in Bengaluru, Mumbai, Pune, Chennai and National Capital Region (NCR).
Our portfolio is home to 280 blue chip corporate occupiers and comprises of 110 buildings with strategic amenities, including four operational hotels and a 100 MW solar park that supplies renewable energy to park occupiers.
Our competitive strengths include the following:
Best-in-class office properties that are complemented by high-quality infrastructure
Diversified, premier, multinational occupierbase
Simple business with embedded growth levers
Assets strategically located in the top-performing markets with high barriers to entry
Highly experienced management team
Backing by renowned sponsor bringing expertise and local knowledge to our operations
Our focus on sustainability while executing our business
Embassy REIT is Indias first listed REIT and the largest office REIT in Asia by area, with its portfolio spanning across 5 major cities in India
Notes: City wise spilt by of Gross Asset Value (GAV). Gross Asset Value (GAV) considered per Mar 26, valuation undertaken by Ms. L Anuradha, in conjunction with independent property consultant review services undertaken by C&W.
Valuation exercise undertaken semi-annually
(1) Comprises 43.5 msf completed, 6.2 msf under construction and 2.8 msf future development (2) Includes completed, under construction and proposed future development
Our Strategy
Embassy REIT aims to maximize the total return for Unitholders by targeting growth in distributions and in NAV per Unit. The operating and investment strategies we intend to execute to achieve this goal include:
Capitalizing on our Portfolio?s embedded organic growth and new development opportunities by:
Leasing up vacant space
Delivering ‘on-campus? development
Maintaining disciplined acquisition strategy:
Acquisition of the Right of First Offer (ROFO) assets, and
Third Party acquisitions in gateway office markets
Driving value through proactive asset management:
Proactive Property Management
Focus on Occupier Retention and Total Business Ecosystem
Adherence to world-class ESG standards
Upholding Industry Leading Corporate Governance standards with:
Majority of directors being Independent Directors
Strong safeguards related to Leverage, Related Party Transactions and Unitholders Interests
Current Business Environment
CY2025 was a year where Indian office real estate saw annual gross absorption at an all-time high of 80 msf (up 8% Y-o-Y), India was one of the best-performing office markets in the world. Global Capability Centers (‘GCC?s) continue to lead the office space take-up in India, on the back of the skilled Indian talent available at scale. Driven by favorable demographics, GCCs drove 40% of the country?s absorption leasing over 30 msf in CY2025 (Source: CBRE). These global companies continue to pursue premium-quality wellness-focused properties, to attract and retain talent and to grow their presence in India. With around 500+ new GCCs expected to be setup by 2030, the Indian office sector is set to repeat this stellar performance in the coming years.
(Source: Nasscom Zinnov Report, Sep?24)
Even amidst the ongoing geopolitical turmoil and the debates on AI disruption, the robust performance of Indian office market continued in Q1 CY2026, with over 20 msf absorption recorded in the top 7 Indian cities. 45% of this demand or 9 msf was contributed by GCCs, again recording an all-time high. Interestingly, only 50% of this GCC demand was from Fortune 500 companies, reflecting the continued emergence of the mid-market segment. Only 8 msf was delivered during the quarter, of which 25% was brought in by Embassy REIT. This demand-supply mismatch is favoring institutional office asset owners and has led to a drop in all-India vacancies by 86 bps Y-o-Y and a double-digit increase in rents in key micro-markets, fueling the current office super-cycle in India. Bengaluru, once again outshined and contributed close to 30% of the total pan-India absorption and to around 48% of the total pan-India GCC leasing during the quarter. (Source: CBRE).
The strong positive momentum is expected to continue for India office, with over 170 msf of absorption vs around 130 msf of new supply expected over the next
2 years.(Source: CBRE)
In FY2026 the REITs witnessed several regulatory tailwinds that makes REITs an attractive proposition for investors. In a landmark move, Security Exchange Board of India (SEBI) re-classified REITs as Equity as opposed to Hybrid earlier. This move puts Indian REITs on parity with the global REITs and enables REITs to be included in the domestic indices. This was followed by Pension Fund Regulatory and Development Authority (PFRDA) easing restrictions on REIT investments, increasing the cap on exposure to units of a single REIT to 5%. On the debt market front, the RBI announced that the REITs are eligible to borrow from banks at the REIT level. This move opens up a wider pool of capital for REITs to fund growth.
Business Performance – FY2026
FY2026 Key Highlights:
Business Highlights
Leased 6.4 msf in FY2026 across 86 deals at 17% higher leasing spreads, including 4.0 msf of new leasing, 1.5 msf of renewals, and 0.9 msf of pre-leases
Chennai saw strong momentum with robust leasing from large global companies - highlighted by one of the city?s largest deals - a full 0.65 msf block taken for a leading US GCC
GCCs accounted for ~60% of the annual leasing activity, led by demand from Technology, Healthcare & BFSI sectors
Portfolio occupancy increased by 300 bps to 90% (by area) and 94% (by value*) respectively in FY2026
Financial Highlights
Grew Revenue from Operations by 13% Y-o-Y to H 45,824 mn and Net Operating Income (NOI) by 15% to H 37,602 mn in FY2026
Delivered Distributions of H 23,963 mn or H 25.28 per unit, up 10% Y-o-Y for FY2026; Cumulative distributions of over H 144 bn since listing
Raised H 112 bn in FY2026, including H 34 bn of 10-year NCDs, lowering the in-place cost of debt by 65 bps to 7.25%
Portfolio GAV grew by 15% Y-o-Y to H 705 bn and NAV by 16% Y-o-Y to H 491.62 per unit
Operational & Growth Highlights
Delivered a record 3.3 msf of new office space this year and acquired a 0.3 msf marquee asset in Embassy GolfLinks
Scaled up redevelopment project at Embassy Manyata to 1.4 msf (vs. 0.8 msf earlier); expected yield of 22%
Total development pipeline of 6.2 msf with a H35 bn capital outlay expected to deliver ~H 6 bn in stabilized NOI by FY2030
*Occupancy by value refers to occupancy of the commercial offices weighted by the Gross Asset Value of completed commercial offices
Actively evaluating ~12.6 msf of potential acquisition opportunities from both Embassy Group and third parties
Hotel portfolio performed well with 63% occupancy and 8% ADR growth Y-o-Y. Advancing a 518-key dual-branded Hilton development at Embassy TechVillage with 207-key Hilton Garden Inn expected to launch in Jul?26
Unitholder register expanded to over 135,000, up from 4,000 at IPO, with a marked rise in domestic retail participation; delivered ~22% total returns in FY2026 As India?s first listed REIT, we continue to deliver on strong business fundamentals and accelerate our growth investments. Since listing in April 2019, we grew our gross asset value by 123% to H 705 bn, scaled up our completed office portfolio by 75% to 43.5 msf, added 619 keys to our Total Business Ecosystem, increased our in-place rents by 51% from H 63 to H 95 psf, expanded our occupier base from 165 to 280 leading companies and our investor base from 4k to over 135k today. All these efforts have been translated into annualized total returns of around 12% to our unitholders, including more than H 144 bn in distributions. Coming to our annual results, FY2026 was another strong year for us with strong double-digit growth across key financial metrices. With 6.4 msf of total leasing, portfolio occupancy at 90% and with 3.3 msf of record new office deliveries in Bengaluru and Chennai, acquisition of 0.3 msf office building at Embassy GolfLinks in Bengaluru and H 112 bn of debt raise at leading rates, we delivered 15% growth in our NOI, 10% growth in distributions and 16% growth in our NAV, on a year-on-year basis.
On the leasing front, we leased a total of 6.4 msf in FY2026 and grew our portfolio market rents by 8% year on year, growing our mark to market potential to 10% from 5% a year ago. The 6.4 msf was signed across 86 deals at 17% blended spreads and included 4.0 msf of new leases, 1.5 msf of renewals and 0.9 msf of pre-commitments.
Notably of the 4.0 msf of new leases, we re-leased 2.4 msf at 24% re-leasing spreads, achieving 20% mark to market and 5% premium over the portfolio market rents on average, demonstrating superior quality of our portfolio.
GCCs continue to contribute to ~60% of the total leasing, with the demand primarily driven by Technology, BFSI, Retail and Healthcare sectors. With 7 new GCC entrants this year, we now have 102 GCCs in our occupier roster of 280 corporates, contributing to over 67% of our annual rentals. We also witnessed ~2.0 msf of tenant exits during the year, primarily from IT services occupiers. Of this, we already leased half of the vacant area at higher spreads and have a promising pipeline for the remainder. About 20% of these exits, however, were led by tenants? expansion strategy within our portfolio. Despite this churn in the portfolio, our occupancy levels grew by 300 bps during the year and our in-place rents went up by 3%.
We are currently at 90% occupancy at the portfolio level, with 10 out 14 assets above 90% occupancy, among which 7 assets are 100% occupied. Bengaluru that contributes to around 75% of REIT?s office portfolio value, continue to see an uptick in the occupancy levels with multiple demand tailwinds. At year-end, our Bengaluru portfolio was at 95% occupancy, a 300-bps uptick year on year. Mumbai portfolio was at 100% levels, with all properties in Mumbai 100% occupied. During the year, our Noida assets witnessed a remarkable uptick in occupancy with a 700-bps increase year on year with all the properties above 90%. Pune market continues to be soft, with 62% occupancy level, as the demand remains muted in micro market we are present in, although some green shoots continue to emerge with completion of some infrastructure upgrades.
On the development front, we delivered 3.3 msf of new office buildings in Bengaluru and Chennai during the year. This included 0.9 msf of Block L4 and 1.4 msf of Blocks D1&D2 in Embassy Manyata and 0.4 msf of Block 10 and 0.6 msf of Block 4 in Embassy Splendid TechZone. The deliveries this year are 86% occupied, including expansion options. Our commercial office development pipeline now totals 6.2 msf, all of which are in Bengaluru and Chennai. This includes the newly launched 2.0 msf developments in Chennai and re-development of Block E1 in Embassy Manyata from 0.2 msf to 1.4 msf. Of the total development pipeline, 0.6 msf is scheduled for delivery in FY2027 and is already 100% pre-leased.
We are expanding our hospitality portfolio, with 518 keys scheduled for launch in FY2027 at Embassy TechVillage. We have also launched construction of 116 key ‘Spark by Hilton? hotel at Embassy TechZone in Pune, scheduled to be delivered in a couple of years. On the acquisitions front, we acquired Pinehurst Block within our prime asset Embassy GolfLinks in Bengaluru from a third party. With a total leasable area of 0.3 msf, the building is 100% occupied by leading financial services company. The acquisition was made at an attractive forward NOI yield of 7.90% with an enterprise value of H 8,528 mn, at a discount to the average of the two independent valuations.
During the year, we also completed our first ever divestment of two strata owned blocks at Embassy Manyata in Bengaluru. As of transaction announcement date (July 31, 2025), the two blocks with total leasable area of ~0.4 msf were 61% occupied with exit notices being received for additional 105k sf. The total consideration for the divestment was H 5,300 mn, a 2.2% premium to the average of the two independent valuations.
On the financial front, we met our FY2026 guidance for Net Operating Income (NOI?) and Distributions Per Unit (DPU?). Our Revenue from Operations stood at H 45,824 mn and NOI at H 37,602 mn, up 13% and 15% Y-o-Y respectively. This was mainly driven by new lease-up at high re-leasing spreads, contracted rent escalations, and delivery of new buildings. This was partially offset by the impact of exits in our office portfolio. Our commercial office margins of 86% and hotel margins of around 51% continue to lead the industry. Our total distributions for the year amounted to H 25.28 per unit, up 10% Y-o-Y, delivering a double digit DPU growth. This DPU growth was driven by 15% uptick in our NOI as well as positive working capital changes, which was partially offset by an increase in our interest costs during the year. During the year, around H 83.8 bn was refinanced at an average interest rate of 7.19%, through a combination of listed debentures, bank loans and commercial papers. Of the total debt refinanced, H 60.4 bn was due for maturity, which was refinanced at an average rate of 7.19%. We were the first Indian REIT to issue 10 year NCDs, raising H 34 bn at a blended rate of 7.40%, reiterating our fiscal discipline and strong demand for our debt. With this our debt book currently comprises of 40% floating rate debt, this tactical approach shields us from dynamic rate cycle. With this, we continue to have a well-diversified debt book, including large public sector banks, private pension funds, domestic mutual funds and insurers. Our net debt book now totals H 214 bn, implying a 30% leverage ratio. Aided by a favorable rate cut cycle and active debt management we have reduced our in-place debt cost by 65 bps during the year to 7.25%. Also, around H 52 bn of our debt matures in the next financial year. As per the independent valuer?s assessment, our Gross Asset Value in Mar?26 stood at ~H 705 bn, up 15% Y-o-Y and our Net Asset Value at H 491.62 per unit, up 16% Y-o-Y. This increase was led by an increase in the market rents, a 25-bps compression in our WACC rate, as well as the new buildings delivered and acquired in our portfolio.
Forward Outlook:
Looking ahead, we remain focused on expanding our portfolio and strengthening operational resilience. With continued demand from global occupiers—particularly GCCs—we remain committed to deepen relationships with our tenants and accelerate development across our core markets. We expect our proactive asset management, strong leasing pipeline, and disciplined capital deployment to support further growth in NOI and distributions. Backed by a robust balance sheet and a resilient occupier base, we are well-positioned to capture emerging demand trends and deliver sustained value to our Unitholders.
Looking ahead, we expect to continue delivering growth in both our NOI and our distributions, supported by multiple levers embedded in our business. For the year FY2027, we expect to deliver NOI in the range of H 41,500 mn to H 43,500 mn and distributions in the range of H 27.00 to H 28.60 per unit, implying a 13% year on year NOI growth and 10% year on year distributions growth at the mid point of the guidance range respectively. This will be led by the following key drivers:
1. Occupancy ramp-up
India remains optimally positioned to drive global offshoring demand, led by favorable demographics, skilled talent availability and cost-efficient high-quality spaces offered in India?s gateway cities. Hence, the demand for India offices continues to be largely driven by GCCs, especially in our core market of Bengaluru. These GCCs are sector-agnostic and continue to climb up the value chain in terms of the work being offshored to India. As per a report, by 2030
Karnataka is expected to host 330 of the Forbes 2000 firms and this will be the major growth driver for India office absorption especially in Bengaluru in the coming years.
On the other hand, many IT services occupiers continue to rationalize their real estate footprint as they focus on optimizing margins amid a business slowdown. Such IT Services occupiers contribute to only about 8% of our portfolio rents (as of FY2026-end), as these occupiers have continued to churn out, positively impacting our in-place portfolio rents. Led by the offshoring demand from these GCCs, we currently have around 1.5 msf of leasing pipeline and expect to increase our portfolio occupancy to 92-93% by area by Mar?27 (vs 90% by area in Mar?26). This occupancy ramp-up will be a major driver for our NOI growth in FY2027.
2. New developments
Our total office development pipeline now stands at 6.2 msf. Of this, 2.9 msf deliveries are scheduled over the next 2 years and around 60% of that is already pre-leased. With a total capital outlay of H 35 bn, we expect the total 6.2 msf projects to add around H 6.1 bn in stabilized NOI by FY2030. We expect to complete and deliver 0.6 msf of office building over this fiscal year in Chennai. This building is already leased out to Cognizant for a GCC tenant. The incremental interest expense on the currently capitalized construction debt will impact our distributions in the short-term, till these buildings are stabilized. Also, the interest expense for the year is expected to increase, driven by full-year impact of buildings delivered during FY2026, new deliveries scheduled for FY2027 and due to the impact of refinancing and rate resets from previous year and present year. Our annual interest cost remains dependent on the trajectory of the market rate movement.
3. Rent growth
Our in-place portfolio rents have grown by 51% from H 63 to H 95 psf since our listing. Contracted rent escalations (generally around 15% every 3 years) and significant mark-to-market opportunity on lease expiries (13% blended MTM till FY2030) are key drivers for the rent growth in our portfolio. Further, the portfolio market rents have grown 8% Y-o-Y, increasing our Mark to market potential to 10% vs 5% last year. In addition, due to the premium nature of our properties, we usually lease at rates above the prevailing market rents. For example, in FY2026, we re-leased at an average of 5% premium to the market rents.
For FY2027, we expect to achieve around 14% contracted rent escalations on 8.9 msf leases. Further, of the 1.7 msf of leases due for expiry, we will look to fill up the expiring area at healthy releasing spreads.
4. Inorganic growth
In addition to our organic growth plans, we continue to evaluate sponsor and third-party acquisition opportunities to enhance our portfolio. We currently have a pipeline of up to 12.6 msf from Embassy group and third parties, that we are evaluating. However, these potential transactions are subject to market and pricing conditions.
5. Financing
We continue to finance our business at industry leading rates. Our net debt book now totals H 214 bn, implying a 30% leverage ratio at 7.25% in-place cost. Through our active debt management, we have successfully raised H 112 bn of debt during the year and reduced our in-place debt cost by 65 bps this year. We also moved 60% of our debt book to fixed rates, thereby limiting our exposure to market volatilities. During Q4, we raised H 14 bn through our second 10-year NCD, priced at an attractive fixed coupon of 7.49% from one of the largest insurance companies in India. With this, we successfully raised a total of H 34 bn of 10-year NCDs this year, doubling the duration of our fixed rate debt book to 45 months. Given our AAA/Stable rated debt book and our access to debt capital pools across mutual funds, banks, insurers & other financial institutions, we are confident on securing best-in-class industry rates for the upcoming refinance of H 52 bn in FY2027.
Quality of Earnings and Revenue Streams
Embassy REIT generates income from owning, operating and leasing an office portfolio consisting of ten infrastructure like office parks and four premier office buildings across India?s 5 major cities
– Bengaluru, Mumbai, Chennai, Pune & National Capital Region (NCR). Additionally, 4 operational hotels and 100 MW solar power plant provide a total business ecosystem offering to our occupier base of 280 tenants. For further details on our revenue streams and split amongst different segments, please refer the sub-section "Revenue from operations" under the subsequent section "Analysis of consolidated statement of profit and loss".
We lease out our premium grade office buildings to blue-chip occupiers to generate rental income. Our tenant base is highly diverse and spread across sectors such as Technology (29%), Financial Services (26%), Research Consulting & Analytics (10%). We derive over 79% of gross annualized rental obligations from multinational corporation, with about 57% headquartered in the United States, as of March 31, 2026. Further, GCCs contributes 67% of our gross rentals. All our occupiers are under legally binding contracts and abide by the lease agreement clauses that generally include 15% rental escalations every 3 years (or 5% every year). The rental income from our occupiers drives our ‘Net Distributable Cash Flows?, which in turn affects our distributions to our investors. Additionally, other factors such as occupancy, lease expires, development timelines and costs, and cost of financing, among others impact the distributions that we pay out to the investors, and these factors are discussed in detail in the next section.
Factors affecting our financial condition and results of operations
Our financial performance and results of operations are affected by several factors. The important ones in our view are listed here
Commercial real estate market: We depend on the performance of the commercial real estate market in the cities where our office parks and commercial offices are located. The commercial real estate market in these cities, in turn, depends upon various factors such as economic and other market conditions, demographic trends, employment levels, availability of financing, prevailing interest rates, competition, bargaining power of occupiers, operating costs, government regulations and policies, and market sentiment.
Our office parks and office buildings are in the key markets of Bengaluru, Mumbai, Chennai, Pune and Noida. Within these cities, our business significantly depends on the performance of the submarkets where our portfolio assets are located. Most of these micro-markets have historically exhibited strong market dynamics with robust absorption and balanced infusion of new office supply resulting in rent stability/growth and low vacancy on an average, even during the tough periods of the pandemic. Our portfolio assets are strategically located within their respective markets, which allows us to attract, retain and grow key occupiers within our office parks and commercial office buildings. A substantial portion of our assets is situated in Bengaluru. In FY2026, 59% of our revenue from operations was generated from our office assets in Bengaluru. As per a recent CBRE Report, Bengaluru is one of the top performing office markets in India accounting for about 30% of the gross absorption and with one of the lowest vacancy levels in the country (during Q1 CY2026). 75% of our portfolio is located in Bengaluru, including 5 assets located in the top micro markets in the city. Embassy Manyata & Embassy TechVillage in Bengaluru contribute to about 62% of the REIT?s value as of March 31, 2026. Embassy Manyata, located in the North Bengaluru micro market and Embassy TechVillage, located in the Outer Ring Road (ORR) micro market accounted for 34% and 23% of the revenues in FY2026 respectively.
Industry of occupiers: Our business also depends on the performance of the industry sectors of our occupiers. Sectors such as technology, banking, financial services, insurance, engineering, and manufacturing drive commercial leasing activity in India. Additionally, new sectors such as healthcare, retail, co-working, research, analytics and consulting have also emerged as key drivers of office real estate demand, as domestic and multinational companies in these sectors have been increasingly expanding or setting up operations in India.
Our tenant base is highly diverse with technology sector clients contributing 29% of our gross rentals, followed by financial services at 26% as of March 31, 2026. We believe that the domination of technology and banking and financial services sector as key occupiers of space in India?s commercial office segment will continue to significantly influence the results of our operations.
As on March 31, 2026 we housed 280 tenants within our parks across diverse sectors and our top 10 tenants by gross rental obligations contributed to only 38% of the rents, of these our existing top two tenants contribute to 12%. The portion of gross rentals from multinational corporations was 79% as of March 31, 2026.
Further, GCCs contributes 67% of the gross rentals as of FY2026. The global and other factors impacting the businesses of these types of corporations may affect their ability to service contracted lease agreements.
Additionally, the recent technological developments in the space of Artificial Intelligence (AI) have cast doubts on the long-term hiring trends of certain employers. Such cynicism on the labor market could influence our business as well as investor confidence in the business. These technological developments can alter the real estate strategy of firms; however, the lasting impact of AI remains to be ascertained. As of FY2026, 67% of our gross rentals are contributed by GCCs and currently GCCs continue to net hire and even build out their AI teams out of India, due to the favorable demographics, and this trend is confirmed by the demand for office space from such firms, largely insulating our business from the impact of AI.
Occupancy rates: The success of our business depends on our ability to maintain high occupancy across the portfolio. Our same store occupancy across the portfolio as of March 31, 2026 was 90%, up 300 bps year on year from 87% in FY2025. At the same time, occupancy by value stood at 94% for the period, up 300 bps from 91% in FY2025. Occupancy rates largely depend on the attractiveness of the markets and submarkets in which the portfolio assets are located, rents relative to competing properties, the supply of and demand for comparable properties, the facilities and amenities offered, the ability to minimize the intervals between lease expiries (or terminations) and our ability to foray into new leases (including pre-leases for under-construction properties or properties where leases are expiring). As of March 31, 2026, 10 of our 14 assets have an occupancy of 90% or higher, demonstrating the attractiveness of the markets we are present in. We believe that our strategically located assets in attractive submarkets allow us to maintain high levels of occupancy. Further, we believe that replicating large infrastructure-like business parks such as ours is difficult given land acquisition complexities and long development timelines in India. We believe that we enjoy greater credibility with our occupiers because of our reputation, scale of operations and the amenities and infrastructure that we provide, which generally allows our assets to be viewed as premium properties, thereby enhancing the portfolio?s appeal to occupiers, which has resulted in high occupancy rates.
Lease expiries: We typically enter into long-term leases with our occupiers, which provide us a steady source of rental income. The tenure of leases for our assets are typically nine to fifteen years (assuming successive renewals at our occupiers? option), with a three-to five-year initial commitment period and consists of a mark-to-market rent on renewals.
We endeavor to foster and maintain strong relationships with our occupiers. We maintain regular communication with the corporate real estate heads of our occupiers through a dedicated customer relationship management programme, which ensures we anticipate and cater to tenant needs. Further, at most of our portfolio assets, we have implemented various energy efficiency and sustainability initiatives, which help attract occupiers. However, in cases where occupiers do not renew leases or terminate leases earlier than expected, it generally takes some time to find new occupiers which can lead to periods where we have vacant areas within the portfolio assets that do not generate facility rentals.
Rental rates: Our rental income primarily comprises facility rentals and income from maintenance services that we provide to our occupiers at the portfolio assets. Accordingly, our revenue from operations is directly affected by the lease rental rates of the portfolio assets, which are in turn affected by various factors like prevailing economic, income and demographic conditions in the submarket, prevailing rental levels in the submarket, amenities and facilities provided, property maintenance, government policies and competition
Escalations: Our existing lease agreements typically have built-in rent escalations, which has led to growth in our revenues in prior years and we expect it will help us generate stable and predictable growth in our revenue from operations. The contracted escalations of leases for our office parks are an average 10%-15% every three to five years. For our city-center office buildings, the contractual escalations stand at 15% every three years. Besides, due to the tenure of our existing leases and growth in the market rents of our portfolio, our average in-place rents are significantly below current market rents. We believe that this presents us with a rental growth opportunity by re-leasing the same space at higher rentals, given the demand for office real estate in respective submarkets coupled with our low vacancy levels. This allows us to be well positioned to capitalise on our Grade A office portfolio by realising the embedded rental growth within our office parks.
Top 10 Occupiers
% of Gross Annualized Rental Obligations |
|
| Occupiers | As of 31-Mar-26 |
| JP Morgan | 6.2% |
| IBM India | 5.9% |
| ANSR | 4.9% |
| Major Australian Bank | 4.5% |
| Fortune 500 Retail Major | 3.6% |
| WeWork India | 3.0% |
| Large US Bank | 2.6% |
| NTT Data | 2.6% |
| Global Healthcare Co. | 2.5% |
| Cognizant | 2.4% |
Total |
38.1% |
Development timeline and costs: As of March 31, 2026, we have 6.2 msf of under construction area and 2.8 msf of proposed development area. The timely development of our pipeline is expected to positively impact on our financial performance. We typically commence construction based on our pre-leasing arrangements and an assessment of upcoming supply and recent absorption trends, as well as various other micro and macro factors impacting the demand for our assets.
We also construct office space on a built-to-suit basis, considering the specific requirements of our occupiers. This enhances our ability to develop and maintain long-term relationships with our occupiers. The timeline for development varies depending on factors such as size, complexity, and occupier specifications. Some examples of our built-to-suit projects are the 1.1 msf building delivered in December 2021 to JP Morgan at Embassy TechVillage in Bengaluru and also the 0.4 msf building delivered in November 2023 to Philips at Embassy Business Hub in Bengaluru.
Construction progress depends on various factors, including business plans, the availability of finance, labour and raw materials, the receipt of regulatory clearances, access to utilities such as electricity and water, the operating and financial condition of the construction companies we use in our business, and other contingencies such as adverse weather conditions. While industry construction costs have increased due to rise in costs of input materials led by global factors, our nimble design and robust procurement strategy, centralized procurement team and long-term relation with key vendors enable us to optimize the construction cost.
We capitalize our construction and borrowing costs in relation to our under-construction properties and capitalize brokerage costs with respect to our investment properties. These costs are depreciated based on the straight-line method over their estimated useful lives. When construction is completed, borrowing costs are charged to our statement of profit and loss as finance costs, causing an increase in expenses.
Cost of financing: Our finance costs primarily comprise interest expense on our non-convertible debentures, commercial papers and borrowings from banks and financial institutions. Our ability to obtain financing, as well as the cost of such financing, affects our business. Though we believe we can obtain funding at competitive interest rates as evidenced basis the fundraising done by us during the past years. The cost of financing is material for us, as we require significant capital to develop our projects and while the recent rate cuts aids in optimizing our cost of financing, any increase in interest rates might affect our distributable surplus.
Government regulations and policies including taxes and duties: The real estate sector in India is highly regulated and there are several laws and regulations that apply to our business. Regulations applicable to our business include those related to land acquisition, funding sources, the ratio of built- up area to land area, land usage, the suitability of building sites, road access, necessary community facilities, open spaces, water supply, sewage disposal systems, electricity supply, environmental suitability, and size of the project. We also keep abreast of the evolving SEBI REIT regulations which oversee the setup, operations and governance of REITs in India. We strive to continuously maintain compliance with these regulations and incur various costs in the process, including fees to consultants, property tax and other taxes and duties.
In addition, some of our portfolio assets are located on land notified as part of SEZs. In the past, the leasing traction for these SEZ areas had been impacted by the uncertainty around amendments to the SEZ rules or introduction of the proposed DESH bill as a separate framework. The leasing traction has picked up again post the Dec?23 amendment to the SEZ rules permitting demarcation of a portion of the built-up area within an SEZ unit on a floor-by-floor basis as a non-processing area. However, certain duties might need to be repaid for this SEZ demarcation which might impact our distributable surplus.
Third Party Operators & Suppliers: We rely on third party operators to successfully operate and manage certain assets in our portfolio. These third parties have significant decision-making authority with respect to the management of the assets, especially on a day-to-day basis. Accordingly, our ability to oversee the day-to-day operations of these assets may be limited. For instance, we rely on third party operators for the operations of our solar portfolio and in the case of Embassy GolfLinks the entity is managed by a joint venture between our manager and a third-party (which manages day-to-day activities such as periodic filings with regulatory authorities and maintenance). Operations of our operational hotel portfolio consisting of 1,096 keys is managed by multiple hotel operators. Our hotel operators have been granted varying degrees of control and discretion in the management and operation of the individual hotel properties under the terms of management agreements. Any material adverse impact on our hotels and their operations on account of the third-party hotel operators will affect our revenues from operations and which in turn could impact our distributions to unitholders.
Competition: We operate in competitive markets for the acquisition, ownership, and leasing of commercial real estate. We compete for occupiers with numerous real estate owners and operators who own properties like our own in these markets. Among the factors influencing leasing competition are location, rental rates, building quality and levels of services provided to occupiers.
Competition from other developers in India may adversely affect our ability to sell or lease our projects, and continued development by other market participants could result in saturation of the real estate market, which could adversely impact our revenues from commercial operations. Increasing competition could result in price and supply volatility, which could materially and adversely affect our operations and cause our business to suffer.
Future acquisitions: We intend to selectively acquire from the Embassy Sponsor or third parties, commercial real estate assets that meet our investment criteria. Each new acquisition that we complete may materially affect our overall results of operations and financial position. In addition, our acquisition strategy may require a significant amount of working capital and long-term funding. Our ability to acquire properties will depend on our ability to secure financing on commercially viable terms, which will in part be affected by the prevailing interest rates or the price of our units at the time of acquisition.
Operating and maintenance expenses:
Our operating and maintenance expenses primarily consist of repair and maintenance (of buildings, common areas, machinery, and others), power and fuel expenses, property management fees and expenses related to housekeeping and security services. Factors which impact our ability to control these operating expenses include (but are not limited to) asset occupancy levels, fuel prices, general cost inflation, periodic renovation, refurbishment, and other costs related to re-leasing.
For the portfolio assets, we provide Common Area Maintenance (CAM) services to our occupiers. We derive income from these maintenance services that include a margin on the expenses incurred for providing such services.
Cost increases because any of the foregoing may adversely affect our profitability, margins, and cash flows. Circumstances such as a decline in market rent or pre-term lease cancellation may cause revenue to decrease, although the expenses of owning and operating a property may not decline in line with the decrease in revenue. While certain expenses may vary with occupancy, operating and maintenance expenses such as those relating to general maintenance, housekeeping and security services may not decline even if a property is not fully occupied.
Geopolitical and Macroeconomic Risk: Our business is influenced by global and regional geopolitical dynamics, particularly due to our dependence on multinational occupiers, many of whom are headquartered in North America and Europe. Escalation in trade tensions, such as wars, changes in tariff policies, protectionist measures, or sanctions, can impact the global investment appetite of our tenants and delay expansion decisions.
As a platform with assets concentrated in key Indian cities and exposure to global corporate occupiers, prolonged geopolitical instability may affect leasing momentum, capital availability, or valuation outlooks. Embassy REIT continues to monitor these developments closely and maintains a conservative balance sheet and diversified occupier base to mitigate potential disruptions.
Impact of Seasonality on Operations: Our portfolio consists of four operational hotels & a 100 MW power plant whose ability to generate income may be impacted from seasonal factors. The energy generated in our solar plant may be impacted by the availability of the sun throughout the year.
For instance, higher unit generation during summers compared to unit generations during winters. However, we strive to maximize the energy generated from the sun at any point in time through proper and orderly maintenance.
In addition, our revenue from hotel operations is subject to the hotel occupancy rates and Average Daily Rates (ADR) of our hotels. The hospitality industry is cyclical, with demand generally following key macroeconomic indicators on a lagged basis. These indicators include general economic conditions and world events, such as terrorist threats or public health issues. Changes in economic conditions can result in decreased demand for hotel rooms, leading to lower occupancy levels and a decline in room rates and ADR.
Results of our operations
Analysis of consolidated statement of profit and loss
| Particulars | FY 2026 | As % of Revenue | FY 2025 | As % of Revenue |
Income and gains |
||||
| Revenue from operations | 45,823.56 | 100% | 40,389.32 | 100% |
| Other income | 934.88 | 2% | 1,423.67 | 4% |
Total income |
46,758.44 | 41,812.99 | ||
Expenses |
||||
| Cost of materials consumed | 468.42 | 1% | 456.13 | 1% |
| Employee benefits expense | 673.53 | 1% | 632.22 | 2% |
| Operating and maintenance expenses | 5,855.26 | 13% | 5,613.66 | 14% |
| Other expenses | 3,738.89 | 8% | 3,223.48 | 8% |
Total expenses |
10,736.10 | 23% | 9,925.49 | 25% |
Earnings before share of profit of equity accounted investee, finance costs, depreciation, amortisation, impairment, exceptional item and tax |
36,022.34 | 79% | 31,887.50 | 79% |
| Finance costs | 14,950.42 | 33% | 13,286.25 | 33% |
| Depreciation expense | 11,229.56 | 25% | 9,297.97 | 23% |
| Amortisation expense | 1,428.29 | 3% | 2,117.18 | 5% |
| Impairment loss | - | 0% | 6,410.93 | 16% |
Profit before share of profit of equity accounted investee and tax |
8,414.07 | 18% | 775.17 | 2% |
| Share of profit after tax of equity accounted investee | 1,151.51 | 3% | 1,155.25 | 3% |
Profit before exceptional item and tax |
9,565.58 | 21% | 1,930.42 | 5% |
| Exceptional Item | 1,770.13 | 4% | - | 0% |
Profit before tax |
11,335.71 | 25% | 1,930.42 | 5% |
| Tax expense | 7,950.26 | 17% | (14,313.94) | (35%) |
Profit for the year |
3,385.45 | 7% | 16,244.36 | 40% |
| Other comprehensive income | (9.76) | 0% | 0.49 | 0% |
Total comprehensive income |
3,375.69 | 7% | 16,244.85 | 40% |
Revenue from operatiwons
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Facility rentals | 32,959.22 | 28,179.86 | 4,779.36 | 17% |
| Income from finance lease | 204.03 | 325.01 | (120.98) | (37%) |
| Revenue from contracts with customers | ||||
| Maintenance services | 6,342.62 | 5,729.04 | 613.58 | 11% |
| Room rentals | 3,287.17 | 3,061.01 | 226.16 | 7% |
| Sale of food and beverages | 1,779.42 | 1,733.87 | 45.55 | 3% |
| Income from generation of renewable energy | 739.94 | 989.94 | (250.00) | (25%) |
| Other operating income: | ||||
| - Hospitality | 254.90 | 244.59 | 10.31 | 4% |
| - Others | 256.26 | 126.00 | 130.26 | 103% |
Total revenue from operations |
45,823.56 | 40,389.32 | 5,434.24 | 13% |
Our revenue from operations comprises the following sources:
Facility rentals
Revenue from facility rentals comprises the base rental from our properties, car parking income, fit-out rentals and other rentals as below:
Base rentals: Base rentals comprise rental income earned from the leasing of our assets.
Car parking income: Car parking income comprises revenue earned from the operations of parking facilities located at our properties; and
Fit-out rentals: For some of our occupiers, we provide customised alterations and enhancements as per the occupiers? requirements (as opposed to warm shell premises that contain only minimally furnished interiors). For such properties, we recover the value of the fit-outs provided through fit-out rentals, to the extent such leases are classified as operating leases as per accounting requirements.
Facility rentals for the portfolio increased by H 4,779.36 million or 17% from H 28,179.86 million in FY 2025 to H 32,959.22 million in FY 2026. A summary of movement is captured in the table below:
Facility rental portfolio
( H in million)
| Amount | Variance (%) | |
| Facility rentals for the year ended March 31, 2025 | 28,179.86 | |
| Increase in contracted revenue | 1,246.96 | 4% |
| New acquisition | 46.13 | 0% |
| Lease up, vacancy and | 3,486.27 | 13% |
| Mark-to-Market (MTM) | ||
Facility rentals for the year ended March 31, 2026 |
32,959.22 | 17% |
Facility rentals increased primarily due to:
Contracted revenue: Contracted lease escalation increased the revenue by H 1,246.96 million, majorly in Embassy Manyata, Embassy Tech Village and Embassy Splendid TechZone.
New acquisition: The Group acquired ERHIPL on 02 March 2026 increasing the revenue by H 46.13 million.
Lease up, exits and Mark-to-Market (MTM): Lease up across Embassy Manyata, Embassy Tech village, Embassy TechZone, Embassy Galaxy, Embassy Oxygen and others as well as renewals spread across all the parks amounting to H 4,787.01 million off set by reduction in facility rentals to the extent of H 1,300.74 million due to Occupier exits during the year.
Income from finance lease
Income from finance leases comprise income from fit-out rentals where such leases are classified as finance leases. Leases are classified as finance leases when substantially all the risks and rewards of ownership transfer to the lessee.
Income from finance lease decreased by H 120.98 million or 37% from H 325.01 million in FY 2025 to H 204.03 million in FY 2026 due to termination of fit-out rental contracts with occupiers at Embassy Manyata.
Revenue from room rentals and sale of food and beverages
Revenue from room rentals and sale of food and beverages comprises revenue generated from our operating hotels viz. Hilton at Embassy GolfLinks and Hilton Garden Inn (HGI) and Hilton Inn (HI) at Embassy Manyata and Four Seasons at Embassy One.
During the year, the hospitality sector improved and witnessed a robust performance due to increase in ADR. This has resulted into an increase of revenue from room rentals by H 226.16 million or an increase of 7% from H 3,061.01 million in FY 2025 to H 3,287.17 million in FY 2026.
The hospitality sector also witnessed a corresponding increase in sale of food and beverages by H 45.55 million or 3%, from H 1,733.87 million in FY 2025 to H 1,779.42 million in FY 2026.
Additionally, the hospitality sector also witnessed an increase in other hospitality income by H 10.31 million or 4% from H 244.59 million in FY 2025 to H 254.90 million in FY 2026 due to increase in other ancillary services.
Key Performance Indicators for our hotels:
| Financial year ended | |||||||||
| Hilton at Embassy GolfLinks | Four Seasons at Embassy One | Hilton at Embassy Manyata | Total | ||||||
| 31-Mar-26 | 31-Mar-25 | 31-Mar-26 | 31-Mar-25 | 31-Mar-26 | 31-Mar-25 | 31-Mar-26 | 31-Mar-25 | Variance (%) | |
| Keys | 247 | 247 | 230 | 230 | 619 | 619 | 1,096 | 1,096 | - |
| Occupancy | 67% | 66% | 42% | 44% | 68% | 69% | 63% | 63% | (0%) |
| Rooms Available | 90,155 | 90,155 | 83,950 | 83,950 | 225,935 | 225,935 | 400,040 | 400,040 | - |
| Rooms Sold | 60,619 | 59,242 | 35,135 | 37,189 | 154,420 | 155,734 | 250,174 | 252,165 | (1%) |
| ADR (H) | 16,113 | 14,351 | 18,691 | 17,867 | 10,799 | 9,986 | 13,195 | 12,174 | 8% |
| RevPAR (H) | 10,834 | 9,430 | 7,822 | 7,915 | 7,381 | 6,884 | 8,252 | 7,674 | 8% |
| Total Revenue (mn) | 1,271 | 1,166 | 1,334 | 1,338 | 2,716 | 2,535 | 5,321 | 5,039 | 6% |
| NOI (mn) | 708 | 630 | 478 | 521 | 1,537 | 1,436 | 2,723 | 2,587 | 5% |
| NOI Margin | 56% | 54% | 36% | 39% | 57% | 57% | 51% | 51% | (0%) |
| EBITDA (mn) | 648 | 566 | 414 | 463 | 1,345 | 1,269 | 2,408 | 2,298 | 5% |
| EBITDA Margin | 51% | 49% | 31% | 35% | 50% | 50% | 45% | 46% | (0%) |
Maintenance services
Income from maintenance services consists of the revenue received from our occupiers for the Common Area Maintenance (CAM) services provided across our commercial office portfolio. Income from maintenance services is generally a function of our maintenance expenses at the portfolio assets, with a change in maintenance expenses resulting in a corresponding change in maintenance service income, along with the impact of lease up/exits at our properties.
Income from maintenance services for the portfolio increased by H 613.58 million or 11% from H 5,729.04 million in FY 2025 to H 6,342.62 million in FY 2026, primarily due to new lease ups and escalations in the CAM rates.
Income from generation of renewable energy
The 100 MW solar park at Embassy Energy is located in Bellary district of Karnataka and helps reduce an estimated 200 million kgs of carbon footprint by providing green energy to our occupiers. Income from renewable energy reduced by H 250 million i.e. from H 989.94 million in FY 2025 to H 739.94 million in FY 2026. This reduction was mainly due to a decrease in tariff rates by the Government by 11 % on a blended basis and lower generation of units by 21 million.
Solar power generation
| Particulars | FY 2026 | FY 2025 |
| Capacity (MW) | 100 | 100 |
| Solar units generated (million units) | 120 | 141 |
| Solar units consumed (million units) | 120 | 141 |
| Average blended tariff (H per unit) | 6.2 | 7.0 |
Other operating income
Other operating income majorly includes revenue from ancillary operating departments at our Hospitality segment as well as leasing support income. Other operating income increased by H 130.26 million or 103% from H 126 million in FY 2025 to H 256.26 million in FY 2026 primarily due to one-time income across Embassy Hub and Embassy TechVillage.
Property-wise revenue from operations
We have provided a property-wise/ asset-wise break up of our revenue from operations for FY 2026 vis-?-vis FY 2025.
Asset-wise revenue from operation
(H in million)
| FY 2026 | FY 2025 | |||||
| As % of total | ||||||
| Asset SPV | Name of the property | Location | Revenue | As % of total revenue | Revenue | revenue |
| MPPL | Embassy Manyata | Bengaluru | 18,087.33 | 39% | 15,429.08 | 38% |
| ETV Assets | Embassy TechVillage | Bengaluru | 10,610.72 | 23% | 8,727.83 | 22% |
| QBPL | Hotel, Retail and Office at Embassy One and Embassy Quadron | Bengaluru and Pune | 2,162.95 | 5% | 2,616.59 | 6% |
| IENMPL | Express Towers | Mumbai | 1,716.92 | 4% | 1,661.23 | 4% |
| VCPPL | Embassy 247 | Mumbai | 1,872.22 | 4% | 1,832.07 | 5% |
| ETPL | FIFC | Mumbai | 1,456.12 | 3% | 1,392.10 | 3% |
| EPTPL | Embassy TechZone | Pune | 2,174.27 | 5% | 2,112.27 | 5% |
| QBPPL | Embassy Qubix | Pune | 810.19 | 2% | 768.92 | 2% |
| OBPPL | Embassy Oxygen | Noida | 2,450.91 | 5% | 1,706.60 | 4% |
| GSPL | Embassy Galaxy | Noida | 1,017.62 | 2% | 863.61 | 2% |
| UPPL | Hilton - Embassy GolfLinks | Bengaluru | 1,271.16 | 3% | 1,166.33 | 3% |
| EEPL | Embassy Energy | Bellary | 739.94 | 2% | 989.94 | 2% |
| ECPL | Embassy HUB | Bengaluru | 402.71 | 1% | 352.82 | 1% |
| ESNP | Embassy Splendid TechZone | Chennai | 1,004.37 | 2% | 769.93 | 2% |
| ERHIPL | Pinehurst | Bengaluru | 46.13 | 0% | - | 0% |
Total |
45,823.56 | 100% | 40,389.32 | 100% |
Other income
The details of other income as per the Consolidated Financial Statements are set forth in the below table:
Other income
(H in million)
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Interest income | ||||
| - on debentures | 302.46 | 291.95 | 10.51 | 4% |
| - on fixed deposits | 109.92 | 52.48 | 57.44 | 109% |
| - on security deposits | 70.45 | 56.01 | 14.44 | 26% |
| - on income-tax refund | 7.25 | 93.68 | (86.43) | (92%) |
| - on others | 3.74 | 382.74 | (379.00) | (99%) |
| Net changes in fair value of financial instruments | 6.97 | 5.17 | 1.80 | 35% |
| Liabilities no longer required written back | 0.26 | 22.28 | (22.02) | (99%) |
| Profit on sale of mutual funds | 365.81 | 131.33 | 234.48 | 179% |
| Net gain on disposal of Property, Plant and | 8.87 | 32.70 | (23.83) | (73%) |
| Equipment/ Investment Properties | ||||
| Miscellaneous | 59.15 | 355.33 | (296.18) | (83%) |
Total |
934.88 | 1,423.67 | (488.79) | (34%) |
Other income for FY 2026 was H 934.88 million, a decrease of H 488.79 million or 34%, compared to H 1,423.67 million for FY 2025. The decrease was primarily due to higher IT refund in FY 2025 (miscellaneous income) and Interest income on advances for M3 Block B received up to the date of receipt of occupancy certificate in September 2024.
Expenses
The Consolidated Financial Statements include expenses as set forth in the below table:
Expenses
(H in million)
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Cost of materials consumed | 468.42 | 456.13 | 12.29 | 3% |
| Employee benefits expense | 673.53 | 632.22 | 41.31 | 7% |
| Operating and maintenance expenses | 5,855.26 | 5,613.66 | 241.60 | 4% |
| Other expenses | 3,738.89 | 3,223.48 | 515.41 | 16% |
Total expenses |
10,736.10 | 9,925.49 | 810.61 | 8% |
Our expenses comprise the following:
Cost of materials consumed
Cost of materials consumed includes direct material cost of our four operating hotels, i.e., Hilton at Embassy GolfLinks and Embassy Manyata and the Four Seasons at Embassy One (Hospitality operations) primarily towards the provision of food and beverage services to the guests at these hotels.
Cost of materials consumed increased marginally by H 12.29 million or 3% from H 456.13 million for FY 2025 to H 468.42 million for FY 2026 in line with increase in revenue from hospitality operations.
Employee benefits expense
Employee benefits expense primarily includes salaries and wages, contribution to provident and other funds and staff welfare expenses in relation to our Hospitality operations. Employee benefit expenses increased by H 41.31 million or 7% from H 632.22 million in FY 2025 to H 673.53 million in FY 2026 mainly due to increment and new hirings in the current year
Operating and maintenance expenses
The details of operating and maintenance expenses as per the Consolidated Financial Statements are set forth in the below table:
(H in million)
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Power and fuel (net) | 609.72 | 774.49 | (164.77) | (21%) |
| Operating consumables | 79.75 | 85.32 | (5.57) | (7%) |
| Investment management fees | 1,250.55 | 1,108.53 | 142.02 | 13% |
| Repairs and maintenance | ||||
| - common area maintenance | 2,856.94 | 2,657.40 | 199.54 | 8% |
| - buildings | 31.35 | 51.13 | (19.78) | (39%) |
| - machinery | 647.40 | 586.58 | 60.82 | 10% |
| - others | 379.55 | 350.21 | 29.34 | 8% |
Total |
5,855.26 | 5,613.66 | 241.60 | 4% |
Operating and maintenance expenses increased by H 241.60 million or 4% from H 5,613.66 million for FY 2025 to H 5,855.26 million for FY 2026 is due to increase in repairs and maintenance expenses due to new deliveries pertaining to L4 and D1/D2 at Embassy Manyata and Block 10 and Block 4 at Embassy Splendid TechZone, full year impact of previous year deliveries pertaining to Parcel 8 at Embassy TechVillage, increase in investment management fees due to higher collection on account of new leases, new deliveries and contractual escalation across multiple SPVs offset by decrease in power & fuel expenses due to reduction in tariff rate.
Other expenses
Other expenses mainly include the following:
| (Rs. in million) | ||||
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Property tax (net) | 1,745.45 | 1,325.25 | 420.20 | 32% |
| Insurance expenses | 129.00 | 136.39 | (7.39) | (5%) |
| Legal and professional fees | 356.87 | 350.09 | 6.78 | 2% |
| Marketing and advertising expenses | 338.82 | 341.78 | (2.96) | (1%) |
| Brokerage and commission | 175.15 | 139.78 | 35.37 | 25% |
| Corporate Social Responsibility (CSR) expenditure | 133.00 | 116.89 | 16.11 | 14% |
| Other direct and indirect expenses | 860.60 | 813.30 | 47.30 | 6% |
Total other expenses |
3,738.89 | 3,223.48 | 515.41 | 16% |
Property tax
Property tax increased by H 420.20 million or 32% from H 1,325.25 million for FY 2025 to H 1,745.45 million for FY 2026 mainly due to new deliveries in FY 2026 i.e., L4 and D1/D2 at Embassy Manyata and Block 10 and Block 4 at Embassy Splendid TechZone, full year impact of previous year deliveries i.e., Parcel 8 at Embassy TechVillage. Further property tax amounting to H 385.47 million was paid under protest under the OTS scheme in FY 2025 in case of Embassy Manyata post which the OTS Scheme has been amended to dispense with the payment of penalty along with the interest. The Group has created provision in FY 2026 in the absence of any further communication from the concerned authorities.
Brokerage and Commission
Brokerage and commission represent brokerage expenses for Hospitality segment. This has increased by H 35.37 million or 25% from H 139.78 million for FY 2025 to H 175.15 million for FY 2026 mainly in line with increase in revenue during the year.
Other direct and indirect expenses
Other direct and indirect expenses majorly include rates & taxes, audit fees, bad debts written off, management fees paid by hotels, travel and conveyance and bank charges. Other direct and indirect expenses increased by H 47.30 million or 6% from H 813.30 million for FY 2025 to H 860.60 million for FY 2026 majorly due to bad debts written off pertaining to one of the tenant in Express Towers.
Earnings before share of profit of equity accounted investee, finance costs, depreciation, amortisation, impairment loss, exceptional item and tax (EBITDA)
Our EBITDA for FY 2026 was H 36,022.34 million, an increase of H 4,134.84 million or 13%, compared to H 31,887.50 million for FY 2025 primarily driven by the increase in Revenue from Operations, savings in power and fuel expenses partially offset by increase in other expenses including hotel operating expenses. The EBITDA margins stood at 79% for both FY 2026 and FY 2025.
Finance costs
The Consolidated Financial Statements include finance costs as set forth in the below table:
Finance costs
(H in million)
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Interest expenses | ||||
| - on borrowings from banks and financial institutions | 4,808.61 | 5,168.07 | (359.46) | (7%) |
| - on lease deposits | 738.22 | 613.26 | 124.96 | 20% |
| - on lease liabilities | 178.15 | 175.11 | 3.04 | 2% |
| - on non-convertible debentures | 8,381.86 | 6,743.22 | 1,638.64 | 24% |
| - on commercial papers | 843.58 | 586.59 | 256.99 | 44% |
Total finance costs |
14,950.42 | 13,286.25 | 1,664.17 | 13% |
We capitalise our finance costs in relation to our under-construction properties. When constructionis completed, the finance cost is charged to our statement of profit and loss, causing an increase in our finance costs. The Company has also explored various new options for refinancing existing debt.
The increase in finance costs is mainly on account of : a. interest expenses incurred on new deliveries during the current year (L4 and D1/D2 at Embassy Manyata and Block 10 and Block 4 at Embassy Splendid TechZone) and full year impact of previous year deliveries (capitalisation of Parcel 8 at Embassy TechVillage); b. interest expense on fit-outs and other capital expenditure; c. interest impact of loan taken for acquisition of Embassy Splendid TechZone; b. higher interest cost due to refinance of REIT Series V NCD 2021 – Series A; e. an increase in interest on lease deposits; offset by f. savings in interest cost due to reduction in average interest rate from 7.90% to 7.25% during FY 2026.
Depreciation and amortisation expense
Depreciation and amortisation expense increased by H 1,242.70 million or 11% from H 11,415.15 million in FY 2025 to H 12,657.85 million in FY 2026 primarily due to new deliveries of L4 and D1/D2 at Embassy Manyata and Block 10 and Block 4 at Embassy Splendid TechZone, full year impact of previous year deliveries of Parcel 8 at Embassy TechVillage offset by higher non-recurring accelerated impact of depreciation pertaining to Block B in FY 2025 as compared to Block E1 in FY 2026 at Embassy Manyata.
Impairment loss/ (reversal) (net of depreciation)
During FY 2026, no impairment loss has been recognized. During FY 2025, the Group had recognised an impairment loss of H 6,410.93 million, out of which H 4,353.21 million pertains to solar business and H 2,057.72 pertains to commercial office segment. This was mainly in relation to reduction in applicable tariffs in solar business as per order dated 27 March 2025 issued by the Karnataka Electricity Regulatory Commission (KERC) and slower than anticipated lease up of commercial properties. The impairment test performed considers the current economic conditions and revised business plans to determine the higher of the ‘value in use? and the ‘fair value less cost to sell?; in accordance with Ind AS 36.
Exceptional item
During the year, the Group sold two strata blocks at Embassy Manyata in Bengaluru aggregating 375,736 sf on a slump sale basis. Gain on sale of these assets amounting to H 1,770.13 million has been recorded as an exceptional item in the Statement of Profit and Loss.
Profit before share of profit of equity accounted investee and tax
As a result of the foregoing, we recorded H 8,414.07 million in profit before share of profit of equity accounted investee and tax for FY 2026, as compared to H 775.17 million in FY 2025, an increase of H 7,638.90 million or 985%.
Share of profit after tax of equity accounted investee
The share of profit after tax in Embassy GolfLinks, our investment entity, an equity accounted investee remained constant, for FY 2026 it was H 1,151.51 million as compared with H 1,155.25 million for FY 2025.
Profit before tax
As a result of the foregoing, we recorded a profit before tax of H 11,335.71 million for FY 2026, as compared to a profit before tax of H 1,930.42 million for FY 2025, an increase of H 9,405.29 million or 487%.
Tax expense
The portfolio of assets which we own are housed in 16 SPVs, which have different tax considerations such as applicability of MAT provisions etc. and accordingly will have varying current tax percentages. On a blended basis, our current taxes for FY 2026 and FY 2025 works out to 6% and 4% respectively of our revenue from operations at the Consolidated Group level.
The Consolidated Financial Statements include tax expenses as set forth in the below table:
Tax expense
| (H in million) | ||||
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Current tax | 2,791.57 | 1,676.45 | 1,115.12 | 67% |
| Deferred tax charge/ (credit) | ||||
| - Deferred tax charge/ (credit) | (447.44) | (1,007.86) | 560.42 | (56%) |
| - Minimum Alternate Tax credit entitlement (MAT) | (316.04) | (841.80) | 525.76 | (62%) |
| - Deferred tax charge/(credit) - Exceptional item | 5,922.17 | (14,140.73) | 20,062.90 | (142%) |
Total tax expenses |
7,950.26 | (14,313.94) | 22,264.20 | (156%) |
Total tax expenses increased by H 22,264.20 million or 156% from H (14,313.94) million for FY 2025 to H 7,950.26 million for FY 2026.
Current tax expense has increased by H 1,115.12 million or 67% from H 1,676.45 million to H 2,791.57 million for FY 2026. This was primarily due to higher current tax in Embassy Manyata due to increase in profit and capital gain tax on slump sale of two strata blocks in FY 2026.
Deferred tax credit (excluding exceptional item) has decreased by H 1,086.18 million from H 1,849.66 to H 763.48 million or 59% due to impairment loss recognized in FY 2025. Deferred tax comprises of exceptional item amounting to H 5,922.17 in FY 2026 million pertaining to write off of MAT credit basis the recent amendments in Finance Act, 2025 and H 14,140.73 million in FY 2025 pertaining to reduction of deferred tax liability on account of change in long-term Capital Gains tax rate from 20% to 12.5% and removal of indexation benefit for calculation of long-term capital gains w.e.f 23 July 2024.
Profit for the year
As a result of the foregoing, our profit for FY 2026 was H 3,375.69 million as compared with H 16,244.85 million for FY 2025, decrease of H 12,869.16 million or 79%.
Non-GAAP Measures Net Operating Income (NOI)
Based on the ‘management approach? as defined in Ind AS 108, the Chief Operating Decision Maker (‘CODM?) evaluates the Embassy Office Parks performance and allocates resources based on an analysis of various performance indicators by operating segments. We use NOI internally as a performance measure and believe it provides useful information to investors regarding our financial condition and results of operations because it offers a direct measure of the operating results of our business segments. Other companies may use different methodologies for calculating NOI, and accordingly, our presentation of the same may not be comparable to other companies. We define NOI for each of our segments as follows:
a. Commercial Offices segment:
NOI for Commercial Offices is defined as revenue from operations (which includes (i) facility rentals, (ii) maintenance services income, (iii) income from finance lease, and (iv) other operating income for Commercial Offices) less direct operating expenses (which includes (i) operating and maintenance expenses excluding investment management fees and repairs and maintenance to buildings (ii) property taxes, (iii) rent and (iv) insurance).
b. Hospitality segment:
NOI for hospitality segment is defined as revenue from operations (which includes (i) room rentals, (ii) sale of food and beverages, (iii) other operating income from hospitality) less direct operating expenses (which includes (i) cost of materials consumed, (ii) employee benefits expenses, (iii) operating and maintenance expenses excluding property management fees and (iv) other expenses).
c. Other segment:
NOI for other segments is defined as revenue from operations (which includes income from generation of renewable energy) less direct operating expenses (which includes (i) operating and maintenance expenses (ii) other expenses). Other income and certain expenses (such as other expenses excluding direct operating expenses, depreciation, amortisation, impairment loss, finance cost and exceptional item) are not specifically allocable to segments and accordingly these expenses are adjusted against the total income of the Embassy Office Parks Group.
The table below gives the computation of our NOI and a reconciliation up to EBITDA:
| Particulars | FY 2026 | FY 2025 | Variance | Variance % |
| Revenue from operations | 45,823.56 | 40,389.32 | 5,434.24 | 13% |
| Less: Property tax | (1,745.45) | (1,325.25) | (420.20) | 32% |
| Less: Repairs & Maintenance | (3,883.89) | (3,594.19) | (289.70) | 8% |
| Less: Other direct operating expenses | (2,592.68) | (2,635.20) | 42.52 | (2%) |
Net Operating Income (segment results for the year) |
37,601.54 | 32,834.68 | 4,766.86 | 15% |
| Other operating expenses | (2,514.08) | (2,370.85) | (143.23) | 6% |
| Interest, dividend and other income | 934.88 | 1,423.67 | (488.79) | (34%) |
EBITDA |
36,022.34 | 31,887.50 | 4,134.84 | 13% |
| EBITDA (%) of revenue | 79% | 79% | - | - |
Segment-level profitability
| (H in million) | ||||||
| Commercial Segment | Hospitality | Other Segment | ||||
| FY 2026 | FY 2025 | FY 2026 | FY 2025 | FY 2026 | FY 2025 | |
| Revenue from operations | 39,762.13 | 34,359.91 | 5,321.49 | 5,039.47 | 739.94 | 989.94 |
| Net operating income | 34,264.99 | 29,355.07 | 2,722.97 | 2,586.82 | 613.58 | 892.79 |
NOI margin (%) |
86% | 85% | 51% | 51% | 83% | 90% |
NOI margins
Our NOI margin marginally increased by 1% from 81% in FY 2025 to 82% in FY 2026.
EBITDA
We use Earnings Before Finance costs, Depreciation, Amortisation, Impairment loss and Tax, excluding share of profit of equity accounted investee (EBITDA) internally as a performance measure. We believe it provides useful information to investors regarding our financial condition and results of operations because it offers a direct measure of the operating results of our business segments. Other companies may use different methodologies for calculating EBITDA and accordingly, our presentation of the same may not be comparable to other companies. EBITDA does not have a standardised meaning, nor is it a recognised measure under Ind AS and may not be comparable with measures among similar names presented by other companies. EBITDA should not be considered by itself or as a substitute for comparable measures under Ind AS or other measures of operating performance, liquidity or ability to pay dividends. Our EBITDA may not be comparable to EBITDA or other similarly titled measures of other companies/ REITs as not all companies/ REITs use the same definition of EBITDA or other similarly titled measures. Accordingly, there can be no assurance that our basis for computing this non-GAAP measure is comparable with that of other companies/ REITs.
We believe that the comparable Ind AS metric to our EBITDA is profit for the year, and a reconciliation between these two is provided here:
| Particulars | FY 2026 | FY 2025 |
Profit for the year |
3,385.45 | 16,244.36 |
| Add: Tax expense | 7,950.26 | (14,313.94) |
Profit before tax |
11,335.71 | 1,930.42 |
| Less: Share of profit after tax of equity accounted investee | (1,151.51) | (1,155.25) |
| Less: Exceptional item | (1,770.13) | - |
| Add: Depreciation expense | 11,229.56 | 9,297.97 |
| Add: Amortisation expense | 1,428.29 | 2,117.18 |
| Add: Finance costs | 14,950.42 | 13,286.25 |
| Add: Impairment loss | - | 6,410.93 |
Earnings before share of profit of equity accounted investee, finance costs, depreciation, amortisation, impairment, exceptional item and tax |
36,022.34 | 31,887.50 |
Net Asset Value (NAV)
We use NAV internally as a performance measure and believe it provides useful information to investorsregarding our financial condition. The computation of NAV is prescribed under the REIT regulations.
This computation takes into account the Gross Asset Value (GAV) as arrived at by our independent external property valuers appointed under Regulation 21 of REIT regulations, along with the recorded book values of other assets as well as all other liabilities recorded in the financial statements to arrive at the NAV.
Our Statement of Net Assets at Fair Value as of the dates indicated, at a consolidated level, along with theNAV per unit is set forth here:
Statement of Net Assets at Fair Value
(H in million)
| Particulars | FY 2026 | FY 2025 | Variance% |
| Gross asset value (GAV) | 705,399.53 | 611,632.40 | 15% |
| Other assets | 52,018.10 | 50,244.16 | (39%) |
| Other liabilities | (291,418.40) | (260,705.00) | 12% |
NAV |
465,999.23 | 401,171.56 | 11% |
NAV per unit |
491.62 | 423.22 | 11% |
L.Anuradha in conjunction with value assessment services undertaken by Cushman & Wakefield, carried out our property valuation as an independent valuer and valued the GAV of our portfolio at H 705,399.53 million with ~93% of value from core commercial office segment and with over 75% of value from Bengaluru, underpinning Embassy REIT?s asset quality as of March 31, 2026.
Asset-wise GAV, along with the key assumptions used in the valuation are provided here:
Valuation Highlights as of 31-Mar-2026
| Leasable Area (msf)/Keys/MW | Valuation Assumptions1 | GAV as of Mar-26 (mn) | ||||||||
| Assets | Completed | Proposed/ U/C | Total | Discount Rate Completed | Discount Rate U/C | Cap Rate/ EBITDA Multiple | Rent/ ADR/Tariff Rate2 | Completed | Proposed/ U/C | Total |
Commercial Assets |
||||||||||
| Embassy Manyata | 14.6 | 2.6 | 17.2 | 11.50% | 12.75% | 8.00% | 105 | 2,42,591 | 17,026 | 2,59,617 |
| Embassy TechVillage | 9.2 | 0.4 | 9.7 | 11.50% | 12.75% | 8.00% | 105 | 1,53,974 | 4,258 | 1,58,232 |
| Embassy GolfLinks3 | 3.4 | - | 3.4 | 11.50% | NA | 7.75% | 170 | 42,469 | - | 42,469 |
| Pinehurst at Embassy GolfLinks | 180 | 8,829 | - | 8,829 | ||||||
| Embassy One | 0.3 | - | 0.3 | 11.50% | NA | 7.75% | 151 | 5,902 | - | 5,902 |
| Embassy Business Hub | 0.4 | 1.0 | 1.4 | 11.50% | 12.75% | 8.00% | 69 | 4,652 | 2,572 | 7,224 |
| Express Towers | 0.5 | - | 0.5 | 11.50% | NA | 7.50% | 350 | 24,499 | - | 24,499 |
| Embassy 247 | 1.2 | - | 1.2 | 11.50% | NA | 8.00% | 135 | 22,437 | - | 22,437 |
| FIFC | 0.4 | - | 0.4 | 11.50% | NA | 7.50% | 350 | 18,406 | - | 18,406 |
| Embassy TechZone | 3.0 | 2.4 | 5.5 | 11.50% | 12.75% | 8.25% | 50 | 23,235 | 2,450 | 25,685 |
| Embassy Quadron | 1.9 | - | 1.9 | 11.50% | NA | 8.25% | 46 | 10,039 | - | 10,039 |
| Embassy Qubix | 1.5 | - | 1.5 | 11.50% | NA | 8.25% | 50 | 10,483 | - | 10,483 |
| Embassy Oxygen | 3.3 | - | 3.3 | 11.50% | NA | 8.00% | 59 | 29,518 | - | 29,518 |
| Embassy Galaxy | 1.4 | - | 1.4 | 11.50% | NA | 8.00% | 51 | 11,311 | - | 11,311 |
| Embassy Splendid TechZone4 | 2.5 | 2.6 | 5.1 | 11.50% | 12.75% | 8.00% | 75 | 15,556 | 5,032 | 20,587 |
Sub-Total (Commercial Offices) |
43.5 | 9.0 | 52.5 | 6,23,900 | 31,337 | 6,55,237 | ||||
Hospitality Asset |
||||||||||
| Hilton at Embassy GolfLinks | 247 | - | 247 Keys | 11.90% | - | 14.0x | 15,000 | 8,876 | - | 8,876 |
| Four Seasons at Embassy One | 230 | - | 230 Keys | 11.90% | - | 14.0x | 18,500 | 9,818 | - | 9,818 |
| Hilton and Hilton Garden Inn at | 619 | - | 619 Keys | 11.90% | - | 14.0x | 5 Star - 13,500 | 19,072 | - | 19,072 |
| Embassy Manyata | 3 Star - 8,250 | |||||||||
| Hilton and Hilton Garden Inn at | - | 518 | 518 Keys | - | 13.25% | 14.0x | 5 Star - 13,500 | - | 8,014 | 8,014 |
| Embassy TechVillage | 3 Star - 7,750 | |||||||||
| Spark by Hilton Hotel at Embassy | - | 116 | 116 Keys | - | 13.25% | 14.0x | 4,037 | - | 239 | 239 |
| TechZone | ||||||||||
Sub-Total (Hospitality) |
1,096 Keys | 634 Keys | 1,730 Keys | 37,766 | 8,253 | 46,019 | ||||
| Others5 | ||||||||||
| Embassy Energy | 100MW | - | 100MW | 11.50% | - | NA | 6.8 | 4,143 | - | 4,143 |
Sub-Total (Others) |
100MW | - | 100MW | 4,143 | - | 4,143 | ||||
Total |
43.5 msf/1,096 Keys/100MW Keys | 9.0 msf/634 Keys | 52.5 msf/1,730 keys/100MW | 6,65,809 | 39,591 | 7,05,400 | ||||
| % Split | 94% | 6% | 100% |
1GAV considered as per March 31, 2026 valuation of the portfolio undertaken by Ms. L. Anuradha, in conjunction with Independent property consultant review services undertaken by C&W. Valuation exercise for the entire portfolio is undertaken semi-annually 2ADR/ Tariff Rates presented on a stabilised basis 3Details include 100% of Embassy GolfLinks operational metrics; however, GAV reflects the REIT?s 50% economic interest in Embassy GolfLinks and 100% of the Pinehurst block located within Embassy GolfLinks 4Details include 100% of Embassy Splendid TechZone (ESTZ). ESNP is entitled to 61% of lease revenue and 100% of common area maintenance (CAM) in ESTZ
5Comprises of Solar Park located at Bellary district, Karnataka
Liquidity and Capital Resources
Overview
Our liquidity position of H 9,696.66 million and lower Net debt to GAV of 30% clears our pathways towards accelerating growth.
Financial resources
As of March 31, 2026, we had cash and cash equivalents of H 9,696.66 million. Cash and cash equivalents primarily consist of cash on hand; balances with banks in current accounts, escrow accounts and deposit accounts with original maturity below three months. Primarily, our liquidity requirements have been to fund construction and asset upgrades. We expect to meet our working capital and liquidity requirements for the next 12 months from (i) cash and bank balances; (ii) cash flows from our business operations; (iii) short term and long term loans from banks and financial institutions, we believe that we will have sufficient working capital to fulfil our present requirements for the next 12 months.
This table depicts a selected summary of our statement of cash flows for the periods indicated:
Cash flows
(H in million)
| Particulars | FY 2026 | FY 2025 |
| Cash generated from operating activities | 35,217.32 | 30,793.18 |
| Net cash flow used in investing activities | (16,510.84) | (16,530.87) |
| Net cash used in financing activities | (15,665.35) | (17,923.38) |
Net increase/ (decrease) in cash and cash equivalents |
3,041.12 | (3,661.08) |
| Cash and cash equivalents at the beginning of the year | 6,630.18 | 10,113.73 |
| Cash and cash equivalents acquired due to asset acquisition | 25.36 | 177.53 |
Cash and cash equivalents at the end of the year |
9,696.66 | 6,630.18 |
Cash generated from operating activities
FY 2026:
Net cash generated from operating activities for FY 2026 was H 35,217.32 million. The increase in cash generated from operating activities from H 30,793.18 million to H 35,217.32 million is in line with the growth in net operating income of 15% and EBITDA of 13% in FY 2026. Our profit before share of profit of equity accounted investee and tax was H 8,414.07 million which was adjusted for non-cash items and items relating to financing and investing activities, movement in working capital and taxes paid by a net amount of H 26,803.25 million. Adjustments to reconcile profit before tax to net cash flows were primarily for depreciation and amortization expense amounting to H 12,657.85 million, finance costs amounting to H 14,950.42 million and interest income of H 493.82 million.
Working capital adjustments primarily comprised an increase in other financial liabilities (current and non-current) of H 1,692.45 million, trade payables of H 494.81 million and other liabilities and provisions (current and non-current) of H 884.05 million and decrease in other assets of H 556.84 million partially offset by an increase in trade receivables of H 130.74 million and other financial assets (current and non-current) of H 1,200.27 million. In addition, we paid income tax of H 2,277.05 million during FY 2026.
Net cash flow used in investing activities
FY 2026:
Our net cash flow used in investing activities for FY 2026 was H 16,510.84 million, primarily due to payment for purchase of investment properties, property, plant and equipment and intangibles including capital work-in-progress and investment property under development amounting to H 18,795.56 million. Such purchases were primarily deployed towards under construction blocks which include Block L4, D1/D2 and Block B at Embassy Manyata, Block 1, 4, 5, 6, 7, 8 and 10 at Embassy Splendid TechZone, Phase II at Embassy Hub, Block 6 at Embassy TechVillage, capital expenditure spends towards various infrastructure and upgrade projects across our parks and the master plan upgrades at multiple assets. Further we have placed money in fixed deposits amounting to H 430.55 million. Such cash outflows were partially offset by cash inflows from the repayment of investment in debentures of H 532.88 million and interest received on bank and other security deposits including interest from investment in debentures of GLSP of H 751.21 million.
Net cash used in financing activities
FY 2026:
Our net cash used in financing activities in FY 2026 was H 15,665.35 million, primarily due to the repayment of borrowings of H 88,017.13 million, payment of interest on our borrowings of H 14,793.36 million, distributions to our unitholders of H 23,185.93 million and payment of lease liability of H 201.95 million, partially offset by H 110,533.01 million from the proceeds of our borrowings.
Distributions
In order to promote standardisation of framework for computing NDCF, a revised framework was defined by SEBI vide master circular no. SEBI/HO/DDHS-PoD-2/P/CIR/2024/43 dated 15 May 2024. The amended framework was approved by the Board of Directors at their meeting held on 2 February 2024. This framework was applicable with effect from 1 April 2024 and accordingly, Embassy Office Parks REIT had computed the NDCF for the previous year. Further, SEBI has amended the NDCF framework vide SEBI master circular no. SEBI/HO/DDHS-PoD-2/P/CIR/2025/99 dated 11 July 2025 w.e.f 1 April 2025. In accordance with this circular, Embassy Office Parks REIT along with its SPVs, subject to applicable provisions in the Companies Act, 2013, needs to ensure that minimum 90% distribution of NDCF be met for a given financial year on a cumulative periodic basis. The distributions shall be declared and paid once every quarter in every financial year.
The aforesaid net distributable cash flows are made available to Embassy Office Parks REIT in the form of (i) Interest paid on Shareholder Debt provided by Embassy Office Parks REIT to the SPVs/Holding Company, (ii) Principal repayment of Shareholder Debt, (iii) Dividend declared by the SPVs/Holding Company.
The Board of Directors of the Manager to the Trust have declared a cumulative distribution of H 24 bn or H 25.28 per unit for FY 2026 and cumulative distribution of H 144 bn since listing.
Borrowings
During the year, ?87,407 million debt was refinanced at an average interest rate of 7.18%, through a combination of listed debentures, bank loans and commercial paper issuances. Of the total debt refinanced, ?68,252 million of debt was scheduled maturity, which was successfully refinanced at an average rate of 7.16%. Proactively refinanced an additional ?19,155 million of debt with lower rate instruments and achieved 90 bps proforma interest savings. Our net debt book now totals ?2,14,151 million, implying a 30% leverage ratio and a 7.25% in-place cost. Further, 40% of our total debt book is at floating rates and an additional 23% is due for maturity in the next 12 months.
Borrowings
This table presents a breakdown of borrowings as at March 31, 2026: as of 31-Mar-2026 Debt Maturity Schedule
| Principal Repayment Schedule | |||||||||||||||
| Description | Rating | Fixed/ Floating | Total Facility | Balance Facility | Outstanding Principal | Amortized Cost | Interest Rate | Maturity Date | FY27 | FY28 | FY29 | FY30 | FY31 | FY32 & Beyond | Total |
At REIT |
|||||||||||||||
| Embassy Office Parks REIT Series IV NCD | CRISIL AAA/Stable | Fixed | 3,000 | - | 3,000 | 2,998 | 6.80% | Sep-261 | 3,000 | - | - | - | - | - | 3,000 |
| Embassy Office Parks REIT Series V NCD (Tranche B) | CRISIL AAA/Stable | Fixed | 11,000 | - | 11,000 | 10,992 | 7.05% | Oct-262 | 11,000 | - | - | - | - | - | 11,000 |
| Embassy Office Parks REIT Series VI NCD | CRISIL AAA/Stable | Fixed | 10,000 | - | 10,000 | 9,990 | 7.35% | Apr-273 | - | 10,000 | - | - | - | - | 10,000 |
| Embassy Office Parks REIT | CRISIL AAA/Stable | Fixed | 5,000 | - | 5,000 | 4,999 | 8.10% | Aug-284 | - | - | 5,000 | - | - | - | 5,000 |
| Series VIII NCD | CARE AAA/Stable | ||||||||||||||
| Embassy Office Parks REIT Series XI NCD | CRISIL AAA/Stable | Fixed | 9,000 | - | 9,000 | 9,003 | 7.96% | Sep-27 | - | 9,000 | - | - | - | - | 9,000 |
| Embassy Office Parks REIT | CRISIL AAA/Stable | Fixed | 10,000 | - | 10,000 | 9,989 | 7.73% | Dec-29 | - | - | - | 10,000 | - | - | 10,000 |
| Series XII NCD | CARE AAA/Stable | ||||||||||||||
| Embassy Office Parks REIT Series XIII NCD (Tranche A) | CRISIL AAA/Stable | Fixed | 15,000 | - | 15,000 | 14,974 | 7.21% | Mar-28 | - | 15,000 | - | - | - | - | 15,000 |
| Embassy Office Parks REIT Series XIII NCD (Tranche B) | CRISIL AAA/Stable | Fixed | 5,000 | - | 5,000 | 4,992 | 7.22% | May-28 | - | - | 5,000 | - | - | - | 5,000 |
| Embassy Office Parks REIT Series XIV NCD | CRISIL AAA/Stable | Fixed | 7,500 | - | 7,500 | 7,499 | 6.97% | Mar-27 | 7,500 | - | - | - | - | - | 7,500 |
| Embassy Office Parks REIT | CRISIL AAA/Stable | Fixed | 20,000 | - | 20,000 | 19,889 | 7.25% | Jul-355 | - | - | - | - | - | 20,000 | 20,000 |
| Series XV NCD | CARE AAA/Stable | ||||||||||||||
| Embassy Office Parks REIT | CRISIL AAA/Stable | Fixed | 14,000 | - | 14,000 | 13,939 | 7.49% | Feb-36 | - | - | - | - | - | 14,000 | 14,000 |
| Series XVI NCD | CARE AAA/Stable | ||||||||||||||
| Embassy Office Parks REIT - CP | CRISIL A1+ / CARE | Fixed | 4,000 | - | 3,948 | 3,948 | 6.44% | Jun-26 | 3,948 | - | - | - | - | - | 3,948 |
| Tranche VII | A1+ | ||||||||||||||
| Embassy Office Parks REIT - CP | CRISIL A1+ / CARE | Fixed | 5,000 | - | 4,683 | 4,683 | 7.15% | Mar-27 | 4,683 | - | - | - | - | - | 4,683 |
| Tranche IX | A1+ | ||||||||||||||
| Term Loan | - | Floating | 3,250 | - | 3,250 | 3,249 | 7.25% | Feb-35 | - | - | - | - | - | 3,250 | 3,250 |
Sub-total (A) |
1,21,750 | - | 1,21,381 | 1,21,143 | 7.33% | 30,131 | 34,000 | 10,000 | 10,000 | - | 37,250 | 1,21,381 | |||
At SPV |
|||||||||||||||
| MPPL Series I NCD (Embassy Manyata) | CARE AAA/Stable | Fixed | 10,250 | - | 10,250 | 10,250 | 6.91% | Oct-266 | 10,250 | - | - | - | - | - | 10,250 |
| ECPL Series II NCD (Embassy Business Hub) | CRISIL AAA/Stable | Fixed | 2,750 | - | 2,750 | 2,739 | 7.95% | Jan-28 | - | 2,750 | - | - | - | - | 2,750 |
| QBPL Series I NCD (Embassy Quadron) | CARE AAA/Stable | Fixed | 4,000 | - | 3,900 | 3,886 | 7.80% | Apr-287 | 100 | 100 | 3,700 | - | - | - | 3,900 |
| Principal Repayment Schedule | |||||||||||||||
| Description | Rating | Fixed/ Floating | Total Facility | Balance Facility | Outstanding Principal | Amortized Cost | Interest Rate | Maturity Date | FY27 | FY28 | FY29 | FY30 | FY31 | FY32 & Beyond | Total |
| Term Loan (Embassy Manyata) | CARE AAA/Stable | Floating | 9,000 | - | 8,834 | 8,782 | 7.20% | Feb-39 | 240 | 287 | 352 | 504 | 565 | 6,885 | 8,834 |
| Term Loan (Embassy Manyata) | CARE AAA/Stable | Floating | 9,200 | - | 9,078 | 9,019 | 6.75% | Sep-39 | 248 | 315 | 402 | 460 | 528 | 7,125 | 9,078 |
| Term Loan (Embassy Manyata) | CRISIL AAA/Stable | Floating | 5,000 | - | 5,000 | 4,999 | 7.00% | Sep-26 | 5,000 | - | - | - | - | - | 5,000 |
| Term Loan (Embassy Manyata) | CRISIL AAA/Stable | Floating | 3,500 | - | 3,377 | 3,360 | 6.75% | Aug-38 | 63 | 72 | 107 | 153 | 182 | 2,800 | 3,377 |
| Term Loan (Embassy Manyata) | CRISIL AAA/Stable | Floating | 4,500 | - | 3,500 | 3,499 | 6.92% | Jun-26 | 3,500 | - | - | - | - | - | 3,500 |
| Term Loan (Embassy Manyata) | CARE AAA/Stable | Floating | 5,000 | - | 4,898 | 4,867 | 7.35% | Sep-39 | 98 | 123 | 163 | 204 | 232 | 4,077 | 4,898 |
| Term Loan (Embassy Manyata) | CRISIL AAA/Stable | Floating | 5,000 | - | 4,970 | 4,942 | 7.15% | Mar-40 | 50 | 50 | 125 | 184 | 298 | 4,263 | 4,970 |
| Term Loan (Embassy TechVillage) | CARE AAA/Stable | Floating | 2,000 | - | 1,980 | 1,979 | 6.95% | Jun-27 | 20 | 1,960 | - | - | - | - | 1,980 |
| Term Loan (Embassy TechVillage) | CARE AAA/Stable | Floating | 2,000 | - | 1,624 | 1,623 | 6.60% | Sep-27 | - | 1,624 | - | - | - | - | 1,624 |
| Term Loan (Embassy TechVillage) | CARE AAA/Stable | Floating | 2,500 | - | 2,469 | 2,451 | 7.21% | Oct-39 | 20 | 44 | 65 | 85 | 107 | 2,149 | 2,469 |
| Term Loan (Embassy TechVillage) | CARE AAA/Stable | Floating | 5,700 | - | 5,315 | 5,279 | 6.90% | Jan-35 | 345 | 430 | 490 | 550 | 610 | 2,890 | 5,315 |
| Term Loan (Embassy TechVillage) | CARE AAA/Stable | Floating | 4,500 | - | 4,461 | 4,456 | 7.50% | Aug-40 | 63 | 133 | 191 | 219 | 233 | 3,621 | 4,461 |
| Term Loan (Embassy TechVillage) | CRISIL AAA/Stable | Floating | 5,000 | - | 4,978 | 4,970 | 7.10% | Dec-40 | 98 | 125 | 141 | 158 | 195 | 4,262 | 4,978 |
| Term Loan (Embassy Quadron) | CARE AAA/Stable | Floating | 8,000 | - | 7,920 | 7,873 | 7.15% | Jun-40 | 185 | 240 | 325 | 395 | 470 | 6,305 | 7,920 |
| Term Loan (Embassy Oxygen) | CARE AAA/Stable | Floating | 2,000 | - | 1,950 | 1,948 | 6.66% | Jan-39 | 20 | 20 | 50 | 94 | 116 | 1,650 | 1,950 |
| Term Loan (Embassy Splendid TechZone) | NA | Floating | 1,700 | - | 1,700 | 1,700 | 7.10% | Dec-30 | 17 | 17 | 17 | 17 | 1,632 | - | 1,700 |
| Term Loan Embassy Splendid TechZone) | CRISIL AAA/Stable | Floating | 5,500 | - | 5,408 | 5,440 | 7.07% | Jun-39 | 55 | 60 | 60 | 60 | 240 | 4,933 | 5,408 |
| Overdraft Facility (Various) | CARE AAA/Stable | Floating | 8,712 | - | 8,642 | 8,643 | 7.97% | Multiple | 1,131 | 345 | 126 | 87 | 6,531 | 421 | 8,642 |
Sub-total (B) |
1,05,812 | - | 1,03,002 | 1,02,705 | 7.17% | 21,502 | 8,695 | 6,314 | 3,170 | 11,940 | 51,381 | 1,03,002 | |||
Total (A+B) |
2,27,562 | - | 2,24,383 | 2,23,848 | 7.25% | 51,633 | 42,695 | 16,314 | 13,170 | 11,940 | 88,631 | 2,24,383 |
1Embassy REIT has option to redeem all or part of the debentures on a pro-rata basis at any time on a specified call option date (between March 2026 to August 2026) subject to terms of the Debenture Trust Deed 2Embassy REIT has option to redeem all or part of the debentures on a pro-rata basis at any time on a specified call option date (between April 2026 to July 2026) subject to terms of the Debenture Trust Deed 3Embassy REIT has option to redeem all or part of the debentures on a pro-rata basis on a specified call option date (October 2026) subject to terms of the Debenture Trust Deed 4Embassy REIT has option to redeem all or part of the debentures on a pro-rata basis on a specified call option date (February 2028 & May 2028) subject to terms of the Debenture Trust Deed 5The debenture holders have the option to seek early redemption of all or part of the debentures on a pro-rata basis on a specified put option date (July 2030) subject to terms of the Debenture Trust Deed 6MPPL/ the debenture holders have the option to redeem/seek redemption all or part of the debentures on a pro-rata basis at any time on a specified call/ put option date (April 2026) subject to terms of the Debenture Trust Deed 7QBPL/ the debenture holders have the option to redeem/seek redemption all or part of the debentures on a pro-rata basis at any time on a specified call/put option date (February 2028) subject to terms of the Debenture Trust Deed
Key leverage metrics
Our key leverage metrics are:
| Particulars | FY 2026 | FY 2025 |
| Net debt to TEV (%) | 35 | 36 |
| Net debt to GAV (%) | 30 | 32 |
| Net debt to EBITDA | 5.33x | 5.36x |
Interest coverage ratio |
||
| - excluding capitalised interest | 2.7X | 2.6X |
| - including capitalised interest | 2.4X | 2.2X |
| Available debt headroom (H in bn) | 129 | 100 |
We continue to maintain a strong liquidity position of H 9,696.66 million and a low leverage of 30% Net Debt to Gross Asset Value (GAV). Considering our dual AAA credit rating, additional proforma headroom of H 129 bn and our ability to raise debt at competitive rates, we are in a strong position to pursue growth through on campus development and accretive acquisitions.
Capital expenditures and capital investments Historical capital expenditure
Capital expenditure comprises additions during the year to property, plant and equipment, capital-work- in progress, investment property and investment property under development.
In FY 2026, we incurred capital expenditure of H 18,795.56 million, primarily towards (a) construction of blocks which include Block L4, D1/D2 and Block B at Embassy Manyata, Block 1, 4, 5, 6, 7, 8 and 10 at Embassy Splendid TechZone, Phase II at Embassy Business Hub, Block 6 at Embassy TechVillage (b) capital expenditure spendings towards various infrastructure and upgrade projects across our parks and the master plan upgrades and leasing area upgrades at various assets (c) fit-outs expenditure at Embassy TechZone, Embassy Splendid TechZone, Embassy Manyata and Embassy One.
Planned capital expenditure
This table presents the development status and balance costs to be spent for development projects in progress as at March 31, 2026.
| Asset | Projects | Area (msf) | Development Keys | Pre- committed/ Leased2 Area (%) | Occupier3 | Estimated Completion Date | Balance cost to be spent (? mn) |
Base-Build Projects (Completed) |
|||||||
| Embassy TechVillage | Block 84 | 1.9 | NA | 97% | Multi-tenanted (Primarily by GCCs) | Completed | 1,037 |
| Embassy Manyata | Block L45 | 0.9 | NA | 100% | Fortune 500 Retail Major | Completed | 341 |
| Embassy Splendid TechZone | Block 106 | 0.4 | NA | 100% | Global Healthcare Co. | Completed | 331 |
| Embassy Splendid TechZone | Block 47 | 0.6 | NA | 44% | Multi-tenanted | Completed | 450 |
| Embassy Manyata | Block Df1 & D2 Redevelopment7 | 1.4 | NA | 86% | Multi-tenanted | Completed | 1,337 |
Sub-total |
5.2 | - | 89% | 3,496 | |||
Base-Build Projects (Under Construction) |
|||||||
| Embassy Splendid TechZone | Block 1 | 0.6 | NA | 100% | Cognizant | Jun-26 | 1,242 |
| Embassy TechVillage | Hilton Hotels8 | NA | 518 | NA | NA | 3 star: Jul-26 | 4,825 |
| 5 star: Mar-27 | |||||||
| Embassy TechVillage | Block 6 | 0.4 | NA | - | - | Jun-27 | 1,810 |
| Embassy Manyata | Block B Redevelopment | 0.9 | NA | 70% | Global Bank9 | Oct-27 | 4,365 |
| Embassy Business Hub | Phase 2 | 1.0 | NA | 23% | WeWork India | Sep-27 | 6,513 |
| Embassy TechZone | Spark by Hilton Hotel | NA | 116 | NA | NA | Dec-28 | 446 |
| Embassy Manyata | Block E1 Redevelopment10 | 1.4 | NA | - | - | Dec-29 | 7,827 |
| Embassy Splendid TechZone | Block 5, 6, 7 & 8 | 2.0 | NA | - | - | Dec-29 | 9,076 |
Sub-total |
6.2 | 634 | 23% | 36,106 | |||
Infrastructure and Upgrade Projects11,12 |
|||||||
| Embassy Manyata | H1 Refurbishment | NA | NA | NA | NA | Jun-26 | 901 |
| Embassy Oxygen | Upgrades | NA | NA | NA | NA | Sep-26 | 859 |
| Embassy TechVillage | Metro Works | NA | NA | NA | NA | Mar-27 | 410 |
| Embassy Splendid TechZone | Master Plan Upgrade | NA | NA | NA | NA | Mar-27 | 922 |
| Others | Various | NA | NA | NA | NA | Various | 2,407 |
Sub-total |
NA | NA | NA | 5,499 | |||
Total (Under Construction) |
6.2 | 634 | 23% | 45,101 |
1Excludes Embassy GolfLinks as it is a portfolio investment, except Pinehurst block at Embassy GolfLinks which is 100% owned 2Excludes all expansion options available to the occupier 3Actual legal entity name may differ
4Occupancy Certificate for Block 8D (Embassy TechVillage) received in Q3FY 2025 and for remaining blocks (Block A, B and C) was received in Q4FY 2025.
5Occupancy Certificate for Block L4 (Embassy Manyata) was received in Q2FY 2026
6Occupancy Certificate for Block 10 (Embassy Splendid TechZone) was received in Q3FY 2026
7Occupancy Certificate for Block D1/D2 (Embassy Manyata) & Block 4 (Embassy Splendid TechZone) was received in Q4FY 2026 8 OC received post quarter. Timeline relects the expected launch dates of the 3-star and 5-star Hilton hotels 9 Expansion Option of 256k sf available, which when exercised will result in 100% precommitment on the building
10 Demolition approval received, other requisite approvals are under process
11 Over the next 3 years
12 Includes select infrastructure and upgrade projects across the portfolio such as Lobby upgrades, Food Court, Refurbishments amongst various others
Off-balance sheet arrangements and contingent liabilities
We do not have any material off-balance sheet arrangements. The table below sets forth our contingent liabilities as of:
(H in million)
| Particulars | FY 2026 | FY 2025 |
| Claims not acknowledged as debt in respect of Income Tax matters | 295.26 | 96.79 |
| Claims not acknowledged as debt in respect of Indirect Tax matters | 345.67 | 661.05 |
| Claims not acknowledged as debt in respect of Property Tax matters | 2,739.49 | 3,124.96 |
Significant developments subsequent to the last financial year
There were no significant events since the date of the last financial statements as disclosed in the annual report which materially and adversely affect or is likely to affect the business or profitability of the REIT, or the value of its assets, or its ability to pay its liabilities within the next twelve months.
Related party
The Group has established a policy to regulate transactions between the Trust and its related parties, in line with applicable laws and regulatory requirements. The Group ensures that all such transactions are duly approved and reported in a timely manner.
The policy governing related party transactions is available on the Group?s website and can be accessed at: https://www.embassyofficeparks.com/ esg/governance-documents/.
There are no related party transactions involving acquisition or disposal of a REIT asset.
Risk Management
We are the owner of a high-quality office portfolio in India that serves as essential corporate infrastructure to multinational tenants and has significant embedded growth prospects. The growth of domestic companies has resulted in robust demand for commercial office space and strong growth across Indias major office markets. We are highly dependent on the prevailing economic conditions in India and our results of operations are significantly affected by factors influencing the Indian economy. Further, the real estate sector in India including REITs is heavily regulated. We are also subject to environmental, health and safety regulations in the ordinary course of our business. These and many other factors might affect our business, results of operations or financial condition. We are committed to maintaining our strong corporate governance standards and have a robust risk management framework in place to address risks that arise from the economic, operational, social and environmental ecosystems that we operate in.
The Board of Directors of the Manager of Embassy Office Parks REIT has overall responsibility for the establishment and oversight of the Embassy Office Parks Group?s risk management framework. The Embassy Office Parks Group?s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group?s activities. The Board of Directors of the Managers of Embassy Office Parks REIT oversees how management monitors compliance with the Group?s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee relies on the ERM reviews performed by the Internal auditor, in performing its role of overseeing the ERM policy and its design and operating efficiency. Internal auditors undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
Internal financial control systems
Embassy REIT has a strong internal financial control system to manage its operations, financial reporting, and compliance requirements. The Manager has clearly defined roles and responsibilities for all managerial positions. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. All business parameters are regularly monitored, and effective steps are taken to control them.
Embassy REIT has appointed one of the Big4 firms to conduct internal audit of its activities. The internal audit plan is reviewed each year and is approved by the Audit Committee. The internal audit is focused on review of internal controls and operational risk in the business of Embassy REIT. Embassy REIT takes a proactive approach to risk management, making it an integral part of our business both strategically and operationally. Our objective is optimisation of opportunities within the known and agreed risk appetite levels set by our Board. We take measured risks in a prudent manner for justifiable business reasons. Our ERM framework encompasses all our risks such as strategic, operational, and compliance risks. Appropriate risk indicators are used to identify these risks proactively. A robust internal control system and an effective, independent review and audit process underpin our ERM Framework.
While management is responsible for the design and implementation of effective internal controls using a risk-based approach, external consultant reviews such design and implementation to provide reasonable assurance on the adequacy and effectiveness of the risk management and internal control systems. The Audit Committee and the Board of Directors periodically reviews the adequacy and effectiveness of internal financial control systems and suggests improvements to further strengthen them. The internal financial control systems are adequate and operating effectively as at March 31, 2026. The effectiveness of the internal control over financial reporting for each of the SPVs as at March 31, 2026 has been attested by the respective statutory auditors of SPVs who expressed an unqualified opinion on the effectiveness of each SPVs internal control over financial reporting as of March 31, 2026.
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